Afghanistan aid urgently needs review
Discrepancy abounds in late audit, Nipa Banerjee writes.
The recent interaction of John Sopko — the American Special Inspector General of Afghanistan Reconstruction — with the Canadian media on billions of wasted aid dollars in Afghanistan, has stirred Canadian public interest on the forgotten subject of Canada’s Afghanistan mission; so much so that the Canadian government, which normally ignores Canadian critics’ warnings on Canada’s questionable performance in Afghanistan, considers a review of Canadian aid to Afghanistan necessary.
Concerned by Canadian newspaper reporting on American auditor Sopko’s findings of wasted foreign aid in Afghanistan due to lack of oversight and endemic corruption, Foreign Affairs Minister Chrystia Freeland has ordered an internal review of Canadian aid to Afghanistan. A review — not an internal but preferably an independent external review — of Canada’s aid to Afghanistan is certainly needed.
Sopko speaks of corruption related to donor-supported health, education and defence programs, and salary supports to health workers, teachers, police and soldiers. His audit reports state that donors make payments for schools and health clinics that do not exist or are not operational and for salaries of personnel never ever hired, with the implication that the money is siphoned off at higher levels of the Afghan bureaucracy.
The postulation is that lack of direct donor oversight and auditing of the joint donor-financed trust funds, used for large-scale aid delivery, increase the probability of corruption and waste. These trust funds, led by multilateral agencies, such as the World Bank and the United Nations, have been marked for lack of proper financial oversight, audit and monitoring. Canada has contributed millions of dollars to programs in Afghanistan through these pooled trust funds. Undeniably, critical reforms to improve management and monitoring of such trust fund mechanisms are required urgently.
However, the effectiveness of joint funding for coordinated delivery of large-scale funds also must be acknowledged and their use promoted instead of supporting individual donor-financed, hoped-for-quick-impact projects, constructing cheap roads and buildings and supplying poor quality but enormously expensive foreign technical assistance.
Ex-officials of Canadian government, quoted in the recent slew of articles on aid in Afghanistan, appear to favour direct Canadian funding of projects. They provide no evidence of better performance of such projects compared to projects financed through multilateral trust funds. History tells us that western donors, including Canada, driven by hopes of better coordination and harmonization of multimillion-dollar foreign aid, chose to deliver large funds through pooled trust fund mechanisms. However, in search of a higher profile for Canada, the Canadian government later decided to reduce the amount of aid delivered through the trust funds and turned to direct funding of Canadian planned and implemented projects, lovingly named Canadian Signature Projects.
Hard evidence shows that while some of the programs (e.g. the National Solidarity Program) financed through the trust funds produced positive outcomes and contributed to development and stabilization, the directly financed and implemented Canadian Signature projects produced all but bleak results.
Assessments of the outcomes of Canada’s directly funded and delivered projects and of those that Canada financed jointly with other donor members of the trust funds, should guide our selection of channels of Canadian aid-delivery in Afghanistan in future. While lack of accountability haunts some of the trust funds today, discarding the trust fund mechanism, an effective instrument for foreign aid coordination, would be equivalent to throwing out the baby with the bath water. It would result in fragmentation of foreign aid and promote uncoordinated donor activities, making aid management hard for Afghanistan, a country so heavily reliant on aid. If lack of oversight and accountability are the problems, the solution lies in donors setting up a better accountability structure in consultation with the multilateral agencies managing the trust funds.